Tesla. In its quest to design the perfect electric car, Tesla has pretty much engineered the best battery on the market. Now, basically, the company is manufacturing an electric car battery for home use. They’re already out there: Tesla’s installed batteries in about 400 locations, including businesses like Walmart. Supposedly this new battery concept will improve upon what’s available now. But the real game changer here—like almost everything about energy—is price.
Thanks to companies like Tesla, the cost per kilowatt-hour of these batteries is coming down much faster than once predicted.
Sell your excess power to your neighbors.
The biggest news here—and why utility companies are likely worried—is that with a cheaper, more accessible battery, homeowners will now very easily be able to achieve complete energy independence. You could store your power for off-peak usage, and you might be able to sell your excess energy to a neighbor. In the near future, cord-cutting may mean severing one’s self from the electrical grid.
The Economics of Powerwall
The Tesla Lithium Ion10 Kwh system could supply 1,000 watts of current to your building for 10 hours. That’s a great amount of energy. The average American home draws an average of 1,200 watts of power around-the-clock, according to the U.S. Department of Energy. For a sense of scale, a desktop computer draws about 100 watts, a big TV 200 watts. Refrigerators cycle on and off, but average about 100 watts.
Battery Power Cost Breakdown
The intimal power to charge the batteries can come from the grid via your power meter, solar panels, wind power or generator, setting aside for a moment the cost of making that electricity in the first place, let’s look at just the cost of using the battery to store it and get it out again.
Laboratory tests for a lithium-ion system, with an initial installation cost of $400 per kwh capacity, 80% efficiency and ability to run 5,000 cycles, the average cost of stored electricity will be 15 cents per kwh.
Battery Recharge Cycles
When you discharge a battery and recharge it, it depreciates the batteries life onetime as it is recharged.
Tesla says its 7 kwh Powerwall can cycle daily, while the 10 kwh system would cycle weekly. The cost of the battery is amortized over the total amount of electricity cycled through it over its lifetime. The less you use it, the higher your average unit cost.
To get your real electricity cost, you have to add to that 15 cent battery charge to whatever you’re paying for that electricity in the first place.
Solar Power Cost
Since the idea is that batteries will work in tandem with solar, we’ll look at what Tesla’s sister company SolarCity charges its customers. According to SolarCity, a customer pays no upfront costs for a system, but then the monthly bill is 15 cents per kwh of power generated.
In the contract, SolarCity has the ability to increase that rate 2.9% a year, which doesn’t seem like much, but would end up raising your cost per kwh above 20 cents by the end of the 20-year term.
So adding together your 15 cents per kwh for solar power plus the 15 cents to cycle a kwh in and out of the battery, and you’re looking at 30 cents per kwh for electricity.
Cost of Grid Power
Cost of Texas Power Grid is approx. 10 cents per kwh to Reliant Energy for electricity that is mostly generated by natural gas burning power plants. In the USA, the average retail electricity price is 13.0 cents per kWh, according to the Dept. of Energy.